N.Z. Jobs Rise at Record Pace, Kiwi Erases Intervention Loss

Morning commuters walk to the central business district from the train station, in Wellington, New Zealand. The labor force participation rate rose to 67.8, matching economists’ expectations, from 67.2 percent in the fourth quarter. Photographer: Mark Coote/Bloomberg

May 9 (Bloomberg) -- New Zealand employers added the most
workers on record in the three months through March, driving the
kiwi to erase losses triggered yesterday by the central bank’s
announcement of intervention to weaken it.

Employment surged 1.7 percent, or 38,000 jobs, from the
fourth quarter, Statistics New Zealand said in a report today in
Wellington. The median forecast in a Bloomberg News survey of 11
economists was for a 0.8 percent gain. The jobless rate fell to
a three-year low of 6.2 percent, less than the 6.8 percent
predicted by economists.

Governor Graeme Wheeler is resorting to currency
intervention and lending restrictions to steer the economy as
surging house prices rule out interest rate cuts and the kiwi’s
strength bars rate increases. He has signaled he won’t raise the
official cash rate from a record-low 2.5 percent this year.

“We expect the RBNZ to stay the course and remain neutral
for now,” Alvin Pontoh, a Singapore-based Asia-Pacific
strategist at TD Securities Inc., said in a note. “However, a
sustained improvement in the data combined with a hot housing
market will force the RBNZ to lift the cash rate in December.”

The kiwi dollar bought 84.54 U.S. cents at 12.02 p.m. in
Wellington from 84.09 cents immediately before the report. The
currency fell to a five-week low yesterday. The yield on the
two-year interest rate swap rose 3.5 basis points, or 0.035
percentage point, to 2.83 percent.

House Prices

House prices rose 7.1 percent in April from a year earlier,
the biggest increase since early 2008, Quotable Value New
Zealand, a government property research company, said in an e-mailed statement today.

Wheeler on April 24 held rates and said he expected to keep
borrowing costs unchanged through the end of the year. The
central bank in March forecast employment would fall 0.5 percent
in the first quarter from a year-earlier and the jobless rate
would be 6.7 percent.

Employment rose the most since records began in 1989 after
falling 1 percent in the three months through December. From a
year earlier, employment increased 0.3 percent, today’s report
showed. Economists expected a 0.7 percent decline.

The labor force participation rate rose to 67.8, matching
economists’ expectations, from 67.2 percent in the fourth
quarter. The jobless rate in the final three months of 2012 was
revised to 6.8 percent from 6.9 percent.

Business confidence gained in the first quarter, according
to a survey by the New Zealand Institute of Economic Research.

Jobs growth was led by manufacturing, professional services
including census workers, and repair and maintenance, the report
showed, without adjusting for seasonal patterns.

Canterbury Jobs

The economy is also being underpinned by a NZ$40 billion
($33.8 billion) rebuild of earthquake-damaged Christchurch.

In Christchurch and the surrounding Canterbury region,
companies are hiring to assist with the rebuild of homes, roads
and commercial buildings damaged in quakes in 2010-11.
Employment in the region climbed 0.6 percent from the year-earlier quarter, twice the pace of national growth, today’s
report showed.

Nationally, full-time employment rose by 31,000 jobs, or
1.8 percent, from the fourth quarter, according to today’s
report. Part-time employment increased by 7,000, or 1.3 percent.
Statistics New Zealand adjusts the full- and part-time
employment figures separately, which means they may not add up
to the total change in employment.

Total actual hours worked per week jumped 3.2 percent from
the fourth quarter and 3 percent from a year earlier, today’s
report showed.